Category Archives: Finance

September 27, 2013 · 17:37

Billion Euro Fine

It seems that the Dutch government has painted itself in a corner. The parties involved are now back into all levels of talks to find a situation where a majority can be found that can live with the situation. This means that there is every chance that the 6 Billion Euro in cut backs will not be met. This means that an additional Billion Euro in fines will go to the Dutch treasury. So, is this a continuing level of evidence that the Dutch administration had been handing out funds it could not pay for in the end?

There is no excuse that can validly be used.

In the first degree, there is no excuse to use the economy or the recession. There are in my mind clear levels of visibility that there had been levels of ‘bad news management’. I had voiced my concerns on several occasions that the economy was nowhere near what was ‘predicted’ by the CBS. I was proven correct on more than one occasion and that whilst I have no advanced mathematics degree. It makes one wonder how those high priced calculators get to their numbers, doesn’t it?

When Germany started to tighten its belt from 2009 onwards, too many were on that horse of optimism where many stated that such rigorous cut backs were not needed. Now, four years later the cutbacks required are a lot more then would have been and that bill cannot be paid. On all sides minorities cry out that the cut backs on one side and/or tax increases on the other side are not proportional and that these actions will not benefit the economy.

I expect one more jolt of bad news and certain parties will stand up opening the retirement funds for the benefit of now. Which means that the economy will now need to rely on a jolt of ‘annexed funds’! Why am I stating this? I see these funds as the ownership of those now working. Whether you start or whether you are at the end of your working life. The funds of you and me are used to steer away from the actual issue of a parliament not able to control its spending. There are additional issues linked to this.

A Dutch blogsite called http://huizenmarkt.blog.nl from Juul Dijkhuis stated “De huizenprijzen zijn inderdaad kunstmatig hoog gehouden, maar mede hierdoor zijn de economische zorgen in Nederland ook kleiner dan bij de ons omringende landen. De gevolgen van een flinke daling kunnen namelijk groot zijn.”

“[translated]: The house prices are indeed kept high through artificial means, because of this the economic worries are not as high as those for the surrounding nations. The consequences of a sizeable reduction in value could be severe”

This is just the first one I found and this statement does not stand alone in this matter. This article came from 2011, after the crash and in the timespan when bad news management (as I see it) was already in place. So consider the issue that the Dutch are not dealing with one issue on economy, but on additional issues in that same year we see SNS Reaal Property Finance, which is no longer here, was already dealing with minus a quarter of a billion for 2011. The Dutch site Calcasa (www.calcasa.nl), which is an independent technology firm, specialised in property value assessment reported in 2012 that in 2011 Dutch property value went down by 17 billion. As stated residential (-1.3%), offices (-1.9%), shops (-5.9%) en corporate spaces (-3.5%)
(At: http://www.calcasa.nl/nl/over-calcasa/nieuws/detail/kwartaalbericht-waarde-nederlands-vastgoed-met-17-miljard-afgenomen-in-2011/105).

So was this just another form of ‘bad news’ management? There is a lack of clarity here, yet consider that already in 2011 we see that different separate branches are trying to keep the good view, and from all indications the government did not intervene, did not (so it seems) openly correct the events. As stated, events that would have impacted the Dutch population in more than one way.

In support we see issues that are linked, but from another side altogether. If we look back to 2011 and if we look at the minister of Education, culture and Science, the honourable Mariëtte Bussemaker We see the following:

“In de brief aan de Tweede Kamer «Meer dan kwaliteit: een nieuwe visie op cultuurbeleid» van 10 juni 2011 (Kamerstuk 32 820, nr. 1) wordt aangekondigd dat het kabinet wil onderzoeken of het mogelijk en wenselijk is het eigendom van de gebouwen van de rijksmusea aan deze instellingen over te dragen.”

“[Paraphrased] House document 32 820 nr 1, Parliament will investigate whether it is possible and desirable to transfer ownership of states museums could be transferred to the institutions that occupy them” This is fair enough, yet in that same document the next part gives us part of the light.

“DTZ Zadelhoff heeft voor het vastgoed van de vier door Deloitte onderzochte Rijksmusea de taxatiewaarde onafhankelijk vastgesteld (waarde in het vrije economisch verkeer). Daaruit blijkt dat er een aanzienlijk verschil bestaat tussen de (hogere) boekwaarde van de vier musea op de balans van de Rgd enerzijds en de (lagere) marktwaarde van het vastgoed anderzijds (circa 25%). Dit verschil, dat voor een belangrijk deel kan worden verklaard door bewuste keuzes in het verleden voor maatschappelijke investeringen in een stabiele museale omgeving, kan zich openbaren wanneer er besloten wordt tot overdracht van het eigendom aan de Rijksmusea.”

“[Paraphrased] Zadelhoff has ascertained an independent value of four the investigated state museums by Deloitte. From there we found that there is a difference approaching 25% between the free economic value and the value in the books. The booked value is a lot higher than the actual market value. The difference, which can be explained through choices in the past of social inclined investments, could become visible when these properties are transferred.”

So when we look at the links, then we see a government that is already visibly aware that there is, what I deem to be a surreal over valuation of properties. It could be that the values are actually a lot lower than what the books incline them to be. How far does this stretch? Because, if that is true and it had been known, then certain measure would have had to be taken long before July 2012. If actions were not made, then we see that the economy, linked to the value of a nation gives us a different percentage. So which additional levels of management are in play? (I actually do not know). But it seems to me that the more issues are linked, the more the evidence indicates that non-acts are beyond acceptable. Those parties now bickering over scraps to avoid hunger are either ignoring or not mentioning that the scraps will not make up for a meal to begin with. So instead of finding solutions, we witness debates (read bickering), where the result of the conversation will not be solution no matter how much a party gives in, which means that the only treasure left are the retirement funds, or more aptly put, the family silver!

That will result in the situation where all are left with less, whilst the political parties seem to remain in cycles of ‘bad news management’. When we look at the annual reports of some of these museums we see the text “De stichting beoordeelt op iedere balansdatum of er aanwijzingen zijn dat een De stichting beoordeelt op iedere balansdatum of er aanwijzingen zijn dat een vast actief aan een bijzondere waardevermindering onderhevig kan zijn.”

“[Paraphrased] the foundation decides on every balance date, whether indications exist that a fixed-asset is linked to a value decrease” so was it? From the parliamentary paper we saw mention that at least 4 have this issue. Was this indicated, or are we now dealing with a time zone issue where the moments of report and ‘enlightenment’ of value reduction seem to miss one another?”

Again, I actually do not know, yet we do not see too much information in this regard. So the active question of linked values are an issue not to ignore, especially if the value had gone too far down, the consequence is that cutting back 6 billion, an amount they are not able to manage now, would not have been enough. This is important to know, because there are two elements not illustrated. The Dutch government place its economy in the European rankings in the top 5 (I reckon it is within the top 10) (at http://www.rijksoverheid.nl/nieuws/2013/03/26/nederland-in-top-5-slimste-economieen-van-europa.html), in addition, the Dutch Newspaper ‘Trouw’ stated last February (at http://www.trouw.nl/tr/nl/4504/Economie/article/detail/3399005/2013/02/23/Triple-A-natie-Nederland-vergeleken-met-Groot-Brittannie-het-land-zonder-AAA.dhtml) that the Dutch economy is in a decent place, yet it also illustrates that the debt would rise until 2018, whilst at that point the UK debt would already be lowering. So why is this important?

Well, if this is about a percentage of the GDP, then the Dutch treasures, which includes its Gross investment and ‘net additions to capital assets’ plus ‘investments in inventories’. So, what happens then the net additions to Capital assets becomes an increasing negative number? Net fixed capital formation is linked to depreciation (and loss of value). It seems to me that if the net value of its treasures become increasingly large, then the mentioned 25% lowering would be disastrous. Especially when we see that investments toward these areas do nothing to increase net value that is linked to the GDP. The view is heavily coloured as the initial paper was only on 4 buildings, yet if we see and accept the levels of bad news management that has been in play, what else is intervening with the correct value of the GDP?

So as this (for now) is about the realistic upcoming 1.2 billion Euro additional fine the Dutch will face if they cannot keep their budget (at http://www.trouw.nl/tr/nl/4500/Politiek/article/detail/3516791/2013/09/26/Moet-Nederland-straks-echt-1-2-miljard-in-Brussel-afrekenen.dhtml), what other information is currently missing?

What if the Dutch need to face a revaluation of their GDP and of the elements of information that are now being ‘managed’, what will the consequence be of such a new valuation? Will the Dutch cutbacks be as severe, or worse in 2014?

What ‘managed’ information will people learn about after the retirement funds are drained?

The views I gave are important beyond the Dutch borders as well. It is a ‘sauce for the goose, sauce for the gander’ approach. From my point of view Dutch parliament is not evil, or corrupt, or criminal (there is a massive spot called grey area though). So, when these issues are detected with the Dutch, then it is important to know that others might be doing exactly the same, to some degree. The UK opposition system makes this situation unlikely but not impossible. The underlying similar dangers would then be coming from both France AND Italy (both in the economic top 5 and higher than the Netherlands). We all know that the waters of the Euro are murky. These matters might illustrate that they are also a lot less safe than we imagined them and if we accept that whatever happens in each of these nations hits all of them as it impacts the Euro, we could see this as a sign that the European economic troubles are far from over. When we have to take into account issues that were non-issues before, once this all comes out, how much damage will the Euro suffer?

 

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September 23, 2013 · 13:31

What lies beneath!

Today is the day we get to take a look at those who get and those who did not receive an Emmy. This is a remarkable year for it. Not because of the winners and non-winners, but from my personal view on the quality of TV shows. There was little way for me to predict the winners in this year. This is not a year where there is a clear winner. They were so many amazing shows and some of them blew away their own fans. So whether we cheer for 30 Rock, Louis, Nurse Jackie or Glee, or even all of them. 2013 shows that the audience won in a very big way. If the bad economy brings out creativity then no one can afford to miss the 2014 Emmy’s as true creativity is just around the corner.

Talking about the economy, is there any news? Well, today, not unlike the Emmy’s the UK is facing issues like vetting the spending by labour, Ed Milliband does not tolerate backstabbing and George Osborne is facing Scepticism over the multi-billion pound sale of Lloyds Banking Group.

So as we are in the sphere of the Emmy, considering that soon there will be the Tony for theatre and the BAFTA and Academy awards for the cinema, here is the Churchill Award. This golden statue shows us Churchill in a thick winter coat and a cigar. Like the image we had of this great man during WW2. We should not confuse the statue with a Hitchcock or any other drama figure. Here we ‘award’ the politician.

So in good standing, the Churchill award for political events goes to (wait for it)……

Nigel Farage of UKIP!

Surprised? Angry?

Let me elaborate. I am not on his side. I remain for now a conservative. Yet, when we watch the news in triviality, where not unlike the issues in Australia Labour seems to be in power struggle after power struggle we wonder why we should support a party where the bickering of being in control takes so much energy and time of a party. Now I am all in favour of a Milliband labour with the bedroom tax gone. Yet, how will certain measures be made with a trillion plus in deficits? Similar warning in regards to the squabbling was reported by BBC’s Justin Parkinson as he recouped the words by Dave Prentis.

The second player, ‘my’ preferred side David Cameron was accused of bringing back more of the ‘nasty’. That is not a bad thing (still highly uncomfortable). I agree that costs have to be cut, yet for now he has not gotten a hold on their spending. In addition his peer in parliament George Gideon Oliver Osborne, Chancellor of the Exchequer did not help much. Yes, on his watch the economy is slightly better. However, if we give weight to the Guardian (http://www.theguardian.com/business/2013/sep/22/first-signs-recovery-despite-austerity-george-osborne) it was not his victory. William Keegan has his ducks more than just in a row and as such this article has weight. Still, the UK could have done a lot worse. Heavily against the conservatives is the Welfare Reform Act 2012 (aka bedroom tax). I always thought of this as a bad move. Especially, in a time and age, where the UK housing shortage is massive and no one can afford to move or change apartment. Nailing these people to their empty bedroom (or cupboard with bed) is just not the way cricket should be played.

So we see the winner Nigel Farage. I consider this man to be dangerous. His ideas are out there and the consequences of moving away from Europe will hurt the UK economy in ways we still cannot foresee. Still the idea of a flat tax approach has merit. When we consider the Stemcor’s of the world (or in this case, just the UK) the umbrella options and other small little twinkles that give the wealth more deductibility’s then the average welfare person many wonder. The fact that he gets stigmatised on matters seem to work positive for him as well.

Still, the plays he plans should he ever get to number 10 will hurt the UK in ways many of his voter will not realise until it is too late. He speaks to those losing much, to those in economic hardship, ever willing to blame anyone else, even if no one (bankers excluded) is to blame.

The man has the charisma and he has the drive, people react to that and in the end, all sheep plenty and few will follow the herder that gives them the best music (even if he is sitting next to a blowing volcano). If the others do not change their ways then my initial prediction from my previous blog (at https://lawlordtobe.com/2013/05/04/ukip-or-u-k-i-p-ur-kiddin-i-presume) will come to be true. Labour and Conservatives on the same opposition side of the isle. That would be one hell of a show to get tickets to.

 

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September 22, 2013 · 19:04

NSA linked to corporate dangers?

The Netherlands are facing a new issue, one that they had not bargained for. It is my personal view that the matter at hand seems to be getting misrepresented, so I need to do something about it.

First let us take a look at the reported facts.

On Saturday 21st September the Dutch NOS reported on TV and on their website on how the Dutch are opening their doors to the NSA (at http://nos.nl/artikel/553680-nederland-opent-deur-voor-nsa.html) The issue is that on business grounds the Amsterdam Internet Exchange is considering opening an office in the US, which would under the FISA all their servers open to investigation by the NSA. In that scenario all of the Dutch internet traffic can at that point be monitored by the NSA.

The first question that comes to mind is what the exact benefit is to open an American office. I wonder why that step is so essential. That reason might be very valid, I just do not know.

The danger is not ‘privacy‘ as such. So many people keep on blabbing on how their privacy is so much in danger. I think that remains to be grossly exaggerated. The additional issue raised by the NOS on their Saturday broadcast (which was not on their website) is a different matter. In there the mention was made by Nico van Eijk from the University of Amsterdam, where British executives from an online gambling site, something that is perfectly legal in England, is not legal in the US and when these executives were in the US on business for other ventures, they got themselves arrested. This info can be found at http://www.cato.org/blog/uk-gambling-ceo-arrested-us-airport. The important quote here is “the U.S. has exploited those treaties to effectively kidnap British citizens who broke no British laws, and extradite them to the U.S. for trial on charges of violating U.S. law“. There is of course another legal side to this. Did David Carruthers actually enable these transgressions of law? Connected to this is the Mark Emery case, which involved a Canadian ‘evangelist’ for medical Marijuana. Did either enable US business?

A quote from the UK’s Daily Mail gave us “Investment bankers Goldman Sachs says that the clampdown by the American authorities could mean ‘that the US could cease to be a viable market for online gaming companies.’ That would be tantamount to destroying the earnings of the main firms since 70% of them originate from the United States.”

The two sides here are that in the first degree these companies do rely on their American market. Knowing that the events were illegal, going to the place looking out for you was not really that bright was it? The second was that the statement came from Goldman Sachs. Bringers of the popular gambling option ‘soon, because of our bad judgement, you no longer own a house‘. Seems a little warped doesn’t it?

We could of course come to the notion that the NSA executive is riddled with spineless paperbacks, not a hardcover amongst them! But the reality is not that clear. In actuality, the game they could end up playing is a lot less appealing for those outside of the US.

For that part we need to take a look at the NSA website (certain parts of it) and to start we need to look at a document that came from the Defense Technical Information Center in Fort Belvoir Virginia. This document called “2009 National Intelligence, A Consumer’s Guide“, where at page 52 it states “The Act specifies that OIA shall be responsible for the receipt, analysis, collation, and dissemination of foreign intelligence and foreign counter-intelligence information related to the operation and responsibilities of the Department of the Treasury.”

Now add the information on the mission statement from the treasury as displayed by the white house. “Support the Department of the Treasury’s mission to promote economic prosperity and the financial security of the United States” this is only part of that mission statement, but by itself it is just as valid. The two now give them additional possibilities through the NSA.

That part is seen on the actual website of the NSA and specifically a department called the ‘Information Assurance Business Affairs Office‘ (at http://www.nsa.gov/ia/business_research/ia_bao/index.shtml), here we see the following parts:

1. The IA Business Affairs Office (BAO) is the focal point for IA partnerships with industry. It also provides guidance to vendors and the NSA workforce in establishing IA business relationships and cultivates partnerships with commercial industry through demonstrations and technical exchanges.

2. The benefits of working with the BAO are (two of them):

  • Increased product marketability
  • Assistance in the development of next generation solutions

These are only part of the mission. They do a lot more. So in the upcoming age where the world will revolve on big data and parsing information, US businesses might get the option to get access to Exabyte sized data, marketable, distributable and sell-able. The intelligence side of the US was never the problem. The corporate side, for which I have tried on several occasions to warn others about (like ‘the Google’ and ‘the Facebook’) will get access to information and innovation on a global scale.

When we consider the utter inability by the US government to get their own spending under control (not just them mind you). As they are now closer and closer on the edge of bankruptcy (17 trillion in national debt will do that to anyone), their own treasury will only need to receive just one mandate ‘to grow and assure the continuation of the United States and its economy‘, which is already part of the treasuries mission statement. In the age where the current president is so polarised against his opposition, where he is adamant that spending is the only option, he will not hesitate to speak these words (can’t really blame him, can I?). It is decently likely that this would give specifically assigned parts of corporate America the option to market Petabytes of data. Outside of the US, the industrial age would then collapse in a way you cannot even imagine. They could globally sell lists on scales no one can compete with. Consider the future to have one provider in data; the ripple effect in the industry would be devastating. However bad you think you have it is nothing compared to what happens if the thought I am having is a reality. Consider the data files people created. The issue I was confronted with yesterday is that someone saw a nice design on a 3d printer and he wanted to use it, but it was not his design. The help file contained the info I expected it to have. All files from that program were to be considered shareware/freeware and could be used and distributed freely. The software maker had done this to avoid liabilities. It made perfect sense. He made a program he wanted people to use, he did not charge anyone for it and to avoid people coming after him for being nice, he made it all freeware. But whoever designs in that program, those data files are freeware too. So anyone can use it. How many programs do you think are out there built on that principle? Now consider those artistic idea’s, traded freely and there is nothing you can do about it.

That was part of the fear I had and as almost EVERYONE gave away their rights on social media, who profits? It seems to me, not the creator!

But then those in social media opted for that, however those on corporate networks and business internet connections did not opt for such futures. The question is, how protected are they from misuse of their data?

So how long until it is no longer about finding terrorists?

 

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September 19, 2013 · 17:53

Greece is for Sale!

This country has roughly 51,000 square miles of development land. It is known for its good weather, for the views that many of the local locations offer, its historical treasures and it comes with a possible workforce of 11,000,000. For the clever investors, this nation can be reverted to the Drachma after sale, if so desired; hence the owner will have its own currency to manipulate. The price of the package is 325 billion Euro. If payment has been made and ownership is transferred the current population can be seen as trespass. Please feel free to dispose of these trespassers as you see fit. In addition Greece has little natural resources. The oil reserves around Thesos are rumoured to have been depleted and the fish supply in the Mediterranean is no longer what it was. Possible quick coin can be made by selling of the national treasures of Greece, including statue and art going back to 1500 BC.

This is the selling pitch! First come, first serve!

Did I get your attention? Good!

I read about another protest in Greece and I thought that it was time to keep a mirror up, one that they will not like, but then at times the truth is truly an ugly entity to watch.

I understand these Greeks, I do get it, they got handed a short straw and they have no options. Yet, instead of blaming the Germans and the IMF, it should be made clear that they did not cut, slice and dice the Greek population; it was their own government who did that. A government that had spent well over 40,000 euro’s for every Greek, money that the Greek government never had and what they did have was never anywhere near that amount of money. For half a decade the Greek government increased spending by roughly 90%, whilst no more than 30% of that was received in taxation. Now if this had been an one year event, then that would not have been too bad, but they continued this for well over half a decade. An important extra fact is that this happened AFTER the Olympic Games. My personal view is that some of these spenders thought that they got some golden credit card that would never demand payment. Such a card does not exist, not now, not ever.

The sad part of all this is that their Austerity measures will not work. The debt is too high for that. Even if the government cuts costs for 80%, it would still take a decade to get rid of the debt. However, at that time Greece will be either without a population of it will have one that is sick, dying and unable to feed itself. The fact that those events are ignored in many places and that we read about is all about the IMF withholding funding, so what to do?

First of all, the entire ‘wealth’ approach towards Greek real estate needs to stop right now. It looks lovely when we see some of these $800K houses all over Greece, yet the amount of people that can afford this, and then the part of that part that will ACTUALLY consider buying it is so small it will not get you anything.

Any realtor coming with some story that it will work is fooling you, and the Greek population has been fooled for long enough. If you are serious about getting tourism and money to Greece then look at creating studio’s and one bedroom apartments in batches of 50 all over Greece. Not stacking them together is also an important part. Think of the next generation that would consider buying a small place now, giving them a holiday spot for years to come. Some will work from there, some will share it. You need to get people there so it means that you need to get them a place where they want to stay. When you start getting 50-100 thousand permanent tourists who will return and who now have a stake in Greece, it means that a connection is made.

Another business is the greying population of Europe. These small places are also a nice option for those who prefer to spend their retirement funds in other places. Those who will happily avoid the UK, Netherlands, Belgium, Germany, Denmark and other places, where the summer is only 3 months, to come to Greece where they can live in summer conditions for 6-7 months a year. We are looking at an optional few thousand of these tourists, able to spend a few hundred Euros a month, whilst enjoying life in a nicer place. That adds up to many millions a month quite quickly. Health care, home care, all options for revenue. These steps are not enough, but they are a start and instead of trying to get impossible prices for houses no one want (because they cannot afford it), look at the options people do want. In Spain similar bad calls were made, placing high end housing that collapsed. Well over a hundred million Euro with no options. Get a grip and start to offer options that will sound good and before you know it, Greece will end up with an additional few thousand people who need a daily bread, a daily piece of beef and some milk. And those retirees often have more than one form of healthcare, which could restart the Greek healthcare system in a very slim lined form. These are elements that start an economy, not the empty protest against facts that can no longer be changed and only make things worse.

These steps will not be enough, but it will be a start. It will take a few dozen more of these options to start making any kind of an impact to restore some sense of Greek economy.

 

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September 18, 2013 · 21:13

Bankrupt or failed? It’s all the same!

This topic applies to two events that are hitting two groups. The first one is about one of the final nails that are getting hammered into the coffin that is laughingly called the US economy.

Yet, what is actually in play? On one hand there are the mentions that the US economy is on the rise, so why is the debt limit such a strong issue?

The second issue is one that is playing in the UK, but about that later.

For these issues we need to consider a few chess pieces, that had been ignored in the past and there is only so much you can do before those ‘forgotten’ pieces rear their ugly head. Yes, I agree that there are signs that the US economy is again slightly on the rise. More jobs are offered, people are getting back onto the horse of labouring enterprises. There is however the other side. The government seems to ignore the need to get their budget in order, they ignore that there is a consequence to non-stop borrowing. Excuse upon excuse, story upon story and where does this lead?

The issues got visibility after Sky News reported on a story that involved the interview with Treasury Secretary Jack Lew. Reuters quoted him stating “We cannot afford for Congress to gamble with the full faith and credit of the United States,” Lew told the Economic Club of Washington, a business forum. Yes, he is correct in that, yet the strong story to hunker down on excessive spending is not loudly voiced. That same situation is what the Dutch government is currently facing. The story there was that it will never be like is was ever again is the story in the Dutch case. The pre 2008 life style is gone and likely gone forever. It will take a small nation like the Netherlands 5-10 years to get their spending under control, but it will never be as good as it was before. Why mention the Netherlands? With 16 million people they are at 5% of the American population. Their debt is around 430 billion. This is less than 2% of the national debt the US has and they have now announced austerity measures to reduce their deficit. The measures will be a helping of bitter fruit to nearly all Dutch. The total US debt is said to be around 60 trillion dollars, which boils down to $9000 for every person on the planet.  Basically, the annual US Currency degradation is larger than the total debt of the Netherlands and the Dutch are looking at the next 10-15 years of financial hardship, and then only if the economy has picked up to the smallest extent by the end of 2015. If not, then those 15 years might not be enough. So the summary ‘the good times are gone forever’ seems amply put. More important, as the US debt devaluates quicker than the annual interest payments, is there any way out left for the US but bankruptcy?

The RABO bank director had made a comment that ‘all will have to tighten the belt’. Sounds nice, but let’s not forget that financial institutions playing fast and loose with other people’s money was cause to most of these issues. The second link is that he is not just mentioning the massive debt, yet a small mention on how the Dutch have such a good retirement treasury. It is another first attempt to get their fingers on the one place that was supposed to keep a population safe. (at http://nos.nl/audio/552545-directeur-rabobank-we-moeten-met-zn-allen-de-broekriem-aanhalen.html)

The US seems to ignore again and again that there is a limit to spending, so the lesson the Dutch are learning the hard way is one that American is currently not ready to face. They might say yes, there is a limit, but then state that they are nowhere near these limits. I disagree! I reckon that the point of no return was reached in 2011. The outstanding debts are now a matter of more than just multiple generations. The fact that we are given stories about returning economies are one thing, the part on how taxation must be paid (and is not) is silenced again and again. the rich move away their fortunes to the Bahamas or other places that will keep it ‘safe’, in addition corporate America is doing the very same thing by moving their ventures to places like Ireland, which allowed several corporations to pay less than 0.2% in taxation. How can the US survive when people without jobs cannot pay taxation and the super-rich move outside of the reach of the US treasury so they do not have to? These steps are socially undesirable and in my mind it is a form of treason. How can a company hide behind the US as a shield stating they have rights and then move away as they shun their own duties? These ignored elements are part of the problem that is likely to soon leave the US in a state of bankruptcy.

The US claims to be a nation of laws, which is fair enough. I think that they forgot that when greed calls the shots, the law becomes a shield for criminals, whilst becoming an anchor for those they are supposed to protect. It is a topsy-turvy world indeed.

So as we move towards the next 8 weeks of uncertainty, as the Democrats and Republicans are moved into a space that is more polarised then sunglasses, we will see that some will get a few coins from the jittery movement of the markets. Also take notice on how some of these people proclaim on how this is all so much unfair and how spending just a little more will save the people. No! It will not. It has not been a solution for almost 2 administrations. It is time to look for an actual solution, instead of prolonging an absolute failure.

So time to take a look at the UK now!

They have their own deficit, but more importantly, they do have a different set of problems. The NHS was at some point to have some kind of system that would record some forms of information. (Or so it would seem).

The NHS IT system is a failure. So much so, that it is the biggest failure in UK history. I reckon it is big enough to be the biggest failure in European history, but that seems too much like splitting hairs. The program had cost 10 billion pound, which makes it a 0.5% of the total British debt. That takes some doing to be such a failure.

Why are these two events connected?

Apart from the usual suspect that both involved politicians, it seems to me that both situations require a clear vision of what needs to be done. In both places they are lacking. It actually goes further than that, however for that part, let us take a look at the NHS laptop.

The Guardian is giving it some attention at (http://www.theguardian.com/society/2013/sep/18/nhs-records-system-10bn)

To do this, we will need to look at a few quotes that were made in this regard.

“MPs on the public accounts committee said final costs are expected to increase beyond the existing £9.8bn because new regional IT systems for the NHS, introduced to replace the National Programme for IT, are also being poorly managed and are riven with their own contractual wrangles.” This is one of the stronger quotes. We are looking at three distinct parts.

1. ‘Own contractual wrangles’ looks to me that the wrong people were involved in the contractual parts. Too much baggage or too little know-how, no matter how you twist this, when the contract is about ‘disputes‘ the people are not linked to a contract, but driven apart though paper (not unlike less successful marriages). This all makes for a nasty ‘separation’.

2. ‘new regional IT systems‘ and ‘being poorly managed‘ means that this is again a track of issues that are set to how good one’s PowerPoint presentation looks, not on how well an infrastructure can be managed. It is a fatal flaw in any IT project.

3. ‘Final costs are expected to increase beyond the existing £9.8bn‘ Like that is a surprise? This means that the costing’s were never properly done. Even in an age where the UK had a 3 year bad run with the economy, it seems to me that proper setting out a charter was never done. No charter, no limits and no results. It is again the same story we see too often when interested parties see the government not as a customer, but as a gravy train with no end in sight.

The IT is no different from any other business, when they see a governmental place where the gravy train just runs through it and they hope they are the station the train will stop. In my mind I see these places as a spot with too many managers and not enough workers. This is often the situation in many organisations. When it is in a commercial organisation it is a nuisance, and if they do not bring home the bacon, they are often let go at some point. With governmental organisations it is a different thing, more important, when it is done on regional area’s where they all want to be ‘in charge’ it adds up to nothing less than a death sentence to any structure that does not have commercial goals. It will collapse onto itself.

Here is the comparison with the US government. Like the NHS both are spending huge amounts they do not have to reflect upon. Not unlike the US their incomes are going down fast as tax havens take away the annual incomes the UK/US used to have. So in all, we are a looking at an engine that is supposed to run whilst we allowed the fuel tank to be external and no longer attached to the car. How stupid is that approach?

Richard Bacon, who had co-written a book on failing government projects, said that the NHS’s particular problems stem from the original contracts signed before 2002.  It comes from a book he wrote with Christopher Hope called Conundrum. I am not disputing his view; it does however show that 10 years later a situation is holding the UK back. Perhaps a better contract team is/was needed? This all reads like my first item I mentioned. Nice that someone from Norfolk can see the issue that the London bigwig’s can’t be bothered to identify on a good day.

The issue I see is that the contracts might have been OK or acceptable at that time, but government situations require a different scope, and signing something that is holding back the UK 10 years later is really a bad contract (from the NHS point of view). So people were hired who lacked that same insight. It is not just on what they were instructed to do, I am questioning whether the right people were ever asked to question the outstanding approach to the long term extent it was needed to be looked at.

Too many are trying the same approach to other scenario’s, which is fair enough, yet those who should be in charge are NOT thinking this through. The mind is lazy, when something works, use it again, I get that! In this case it was not a solution and neither is it when it comes down to spending again and again to shove forward an economy that requires $10 for a return of $0.10. It is bad business through and through.

The one quote from the Guardian article is the crux ‘The government was keen to distance itself from the problem.‘

That is just not an option. Moreover, if it wanted that, it should have never gone near this issue to begin with. If we look at the BBC in 2011 (http://www.bbc.co.uk/news/uk-15014288) the following quote comes forward “Health Secretary Andrew Lansley will say: “Labour’s IT programme let down the NHS and wasted taxpayers’ money by imposing a top-down IT system on the local NHS, which didn’t fit their needs. We will be moving to an innovative new system driven by local decision-making.”

Whilst in July 2010 the issue stated by the BBC (at http://www.bbc.co.uk/news/10557996) was: “Mr Lansley also announced he expected all NHS trusts, which run hospitals and mental health units, to get foundation status by 2013.” So what did get done? More important, it states nothing about abandoning this ‘new’ system at the moment of release.

It all gets a little more hairy when you consider the quote in that very same article ‘Professor Chris Ham, chief executive of the King’s Fund think-tank, said: “It is a very radical programme. We have never seen anything like this since the inception of the NHS in 1948.“‘

It seems to me that this was another PowerPoint approach by those who talk nice but have no idea where the keyboard is stored. Certain quality questions should be asked from those who can only think in election terms. These systems are supposed to outlast them all. This is an issue which has, not once been properly dealt with in either the US or the UK.

How much more tax money will be spent on trains that lead to a place called nowhere?

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August 19, 2013 · 22:11

Tax evasion, copyrighted by Vodafone?

If we look at copyright in the UK, then according to the UK copyright service, which states that “In the case of business ideas, it is again the recorded work rather than an intangible idea that is protected. Copyright would apply to items such as written documents, artwork, etc. – i.e. a Business plan, promotional literature, website, logo, and such items could certainly be registered.”

From that point of view, the creative tax efforts by Vodafone could be seen as an original work of ‘art’ (by lack of a better word), yet are they alone and are they really the first?

Yes, there is so much frustration in voices of people all around me as I hear them complain about the too fast rising cost of living. The fact that I saw an article last week in a newspaper stating that the minimum income for getting a mortgage in London now exceeds a million pounds, which I reckon is some new record to fight. So as many, who dream of a place around Swiss Cottage or Bond street (to keep the Lord’s Cricket grounds within walking distance), we see that this new price tag makes London an affordable place, mainly for Bankers and dealers in amphetamine based chemicals and that is pretty much it. So when these realities hit us and we see that a deal is struck with Vodafone for hundreds of millions of revenue (for the goal of non-taxability) made by what was described as an empty office in Ireland, waves of anger hit many people. This could be seen as a sign that the rich will get richer, at the expense of everyone else.

But is that the actual truth? It seems more a sign of the time than anything else. Vodafone is in pretty good company. They are actually one of the smaller players when we consider grocery shop sized companies like Google and Amazon. It gets to be a lot more hilarious listening to MP Margaret Hodge complaining about it to Google (in May 2013), whilst she is directly connected through family to Stemcor who is having the very same artistic approach to the payment of taxation (or lack thereof). The Telegraph in November 2012 reported that Stemcor, which reported revenue around 2.1 billion with a reported profit of 65 million paid a mere 163,000 pounds in taxation.

Whoever came up with that idea was worth his weight in gold and gemstones in the eye of these corporations.

It does not end there and it goes far beyond the borders of the UK. Consider the following. A software company has an item prices at ‘X’ and then adds consultancy valued at ‘Y’ and the total being ‘Z’ is charged.

So let us take a basic approach. The customer wants the package which requires software and a consultant and is willing to pay 100, consultancy is set at the basic price of 80, which means if the disc could be valued at 20, the price is met, and as such the customer is a new and happy customer. Yet, the books would reveal that even though 100 is truly placed in the books (as a package deal), the disc value is now set at 70 and the consultants at 30, 100 remains the fixed set price. It is interesting that the 70 is set towards the foreign owner of the program and a value of 30 remains behind. Of course the consultant was more (a lot more) expensive, and as this is all within one corporation the consultant will get his monthly income. Yet, was there a case of tax evasion?

It becomes an interesting debate, more important, it becomes the environment of global corporations and even more interesting is where the revenue and taxable revenue should be placed. I would share the view that this is more than a sign of the times; it is now fast becoming THE sign of the future.

In the age of technology today, many government types (PM, MP’s and exchequers alike) might look at certain developments of ‘new technology’ moves, as corporations go to the cloud and digital distribution, yet there seems an apparent lack of ‘comprehension’ is not the right word, perhaps it is ‘realisation’ that all these revenues would no longer be taxable and Microsoft is not even close to being a frontrunner. At present Adobe is far in the lead there. Consider all these advertising and publications houses, they are in abundance in the UK and those houses have moved to some extent, or are largely moving to the Adobe creative cloud, software, that is no longer sold in the UK, costs that are paid for in the UK and are therefore tax deductable revenue, which is shrinking the UK government revenue pie chart by a lot, especially as revenue from the other side of that equation is no longer in the UK for any level of taxation.

Whether we realise it or not, the old tax deduction scheme was designed on some level of equilibrium. We had tax deductions on one side, because we bought certain items like hardware and software. Hardware is now no longer the expensive post it used to be and the software part that is still steep in some cases is no longer bought, it is leased. As such the equilibrium is gone and a nation cannot continue on one side to hand out deductions as the other side of the scale no longer exists. This gives us two dangers. The first is that certain parts would lose deductibility as the other side stops existing; this should be seen in the light that the cost of business is going up, whilst revenues will not get better. This approach is set by the bulk of cloud providing ‘solutions’ and that group is growing really fast. If the UK government (not just them) loses out on taxable revenues exceeding 15 billion pounds on software alone, where will they get the money from? When we consider the trillion pound debt, then we should worry about such changes and it is not just the UK who is facing them. These companies as mentioned before are doing this on a global scale, which means that Europe is getting hit hard all over the place and it is not unlikely that as cloud servers are placed all over the planet these companies will move into new group that could be labelled as ‘the global non-taxable core of corporations’.

In the past I proclaimed strongly that when we saw the information about Microsoft with their Xbox One approach and the cloud was not about gamers. Gamers do not warrant the implementations of over 300,000 servers. Yet, add the earlier mentioned events to the equation and we end up with a global customer base of software and as Microsoft stated it themselves, an entertainment provider of TV, Movies and Software, all in the cloud! As we see the situation now, likely less than one tenth of a percent might end up being taxable. In that same light should you wonder why NTT DoCoMo was so happy to get into the Indian market, then here is the evidence. Out of a very rough estimation (by me) of a total value of entertainment products that is cloud distributable which exceeds 350 billion (business and entertainment products), consider that these products would in future yield less than 0.5 billion in tax revenue on a global scale. This means that national infrastructures on a global scale are about to get hit really hard (unlikely before 2014). So as NTT DoCoMo starts streaming 4G based entertainment solutions, a massive amount of taxable revenue would no longer end up being taxable at all. So long Tax department of India!

It was exactly for these reasons that I advocated an approach where taxability of services are charged on the consumers side, to avoid the pitfall many governments are about to get faced with. That approach would end the dangers of Google, Amazon, Vodafone et al to walk away with a ‘non-taxability’ based commission solution.

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August 16, 2013 · 13:16

Political ego and their costs

I recently wrote a little about the Dutch Fyra train, a high speed billion Euro train that is still not functioning. There have been several pointing fingers, yet why is this such a complicated project?

You see, a project is basically a simple thing. It has a goal, it has requirements, it has noted milestones and if the project manager is a clear communicator, then that person has the easiest and best paid job of them all. That is the theory!

The reality is less clear. It becomes an increasing mess, when those in charge make oral promises and not follow them up, or even better, in some commercial corporations where sales executives make so many changes on the fly to wear the project manager down, so when things are asked, those sales executives respond with “where is it written down?” and the problem of it all remains in the clear. This latter example happens in several situations where the Sales department and not the project manager is in charge.

With Fyra there is a third tier, namely the politicians. The NOS reported last night that this group had been putting pressure on the Fyra project. Even though the testers reported massive amounts of events, flaws and even clear malfunctions and design flaws, they seem to have been ignored. These issues add up to a system that should not have been implemented. The political pressure that required ‘high speed train revenues’, in the light of spending was getting louder and louder. So over the heads of those people in charge stating that there are issues, the Fyra was implemented against the technical proven flaws.

I discussed the fyra in a previous blog called ‘Multi billion train ride’ on June 5th.

Now they have a situation where a train was accepted in this light of events and in that same light must be paid for. The Dutch rail roads do not want to pay and AnselmoBreda is telling them to pay. Even though it was never completely a fault by AnselmoBreda, there are more and more clear indicators that political interfering by approving something that was not ready seems to have been a clear interfering factor. So apart from the 7 billion in rails, they are looking at an additional half a billion for 19 additional trains that do not do what they are supposed to do. Basically, they would end up being regarded as VERY expensive non hi-speed trains. Then there are the annual interest and maintenance costs on 7 billion of rails, the list grows on and on. Consider these costs whilst the government needs to push 6 billion in cut-backs. Are you having fun yet?

So basically, a multi-billion Euro push, by politicians, who were guided by ego and a misguided sense of profit, the second factor was never a reality to begin with. If we consider this and see that under current conditions the Hi-Speed trains are not an option, then an additional 7 billion has been wasted. I personally wonder how many people will become non-accountable and in addition will be reason for a massive bill to the tax payer. Considering these events, the upcoming parliamentary committee might take a lot longer than many bargained for, which additional costs to boot.

So why are incompetent politicians getting in the way of sound business?

This claim is in this instance not about the present group, it was the previous groups interfering with this process, yet overall when we read some of the current statements on capping banking incomes, and then when it is decided that the new head of Robeco must get 30 million a year, nothing can apparently be done. Ah, the joy of claim versus reality!

There are several indicators that the UK’s version the HS2 is on similar tracks. As reported by the Guardian in July, there have been voices that the high speed North-South line, which will cost to the scope of 40 billion Euro is going in a not dissimilar direction. Even though the UK government is claiming a 20% nett return, the additional factors might have not been weighted enough. Consider that the current issues involving price hikes for train rides are growing between 4% and 9%, the group that can no longer afford these kinds of prices is growing fast. More important, these price hikes are now pushing people away from rail and towards buses for the sheer cost of it. This is an entirely opposing reaction to what the UK government needs it to be.

Those in favour of HS2 claim in the quote “This is a massively misleading oversimplification because it doesn’t take into account the significant financial returns that will be generated from an investment in high-speed rail.”

Even though it is given that unlike the Netherlands, the distances in the UK make for a much more viable need, we should not negate that this is about connecting London to Birmingham. I agree that it is too simple to state that this line is for all those Ashton Villa fans in London, yet the same flaw is shown, when we consider the actual issue. If the distance is 119 miles, then a normal train at 125Mph does it in just under an hour, then why add 40 billion to install a train doing 155 Mph? Getting there 10-15 minutes faster does not warrant such expenses, more important, considering the economic charges, the group willing to pay such an extra amount to get so little extra time would be dwindling a lot faster than some might think, which beckons the question “What significant financial returns?” it is not until the train goes beyond 200Mph that this all becomes a more interesting issue, which means a 20-25 minute saving on that part alone. Here I agree that some (not all) will consider it. The question becomes how much extra will people have to pay until the 50 billion returns is begotten? In my mind that requires a commuting population a lot higher then it seems to have, or the tickets will become extremely pricey to say the least. In my mind, the wisdom is in the middle, it takes a massive amount of traveller, all paying top pound a day. Considering that the economy is nowhere near that strong in the UK until past 2016, the costs involved might be way too high. This all in the end gives weight to the statement made by the Institute of Economic Affairs calling it a “political vanity project“.

So which cheques are underwritten by a political ego and can people afford the consequences of such amounts?

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August 13, 2013 · 12:31

Bankrolling a politician

The guardian made me aware of an interesting twist in Australian politics (at http://www.theguardian.com/world/2013/aug/12/singleton-funds-sporting-candidates-election). The information as presented yesterday evening is that the overly wealthy John Singleton will be ‘bankrolling’ (perhaps sponsoring should have been a better word) two sportsmen Nathan Bracken (Cricket) and Lawrie McKinna (Coach of the Central Coast Mariners). Let’s take a look at the two.

To be honest, supporting Lawrie McKinna makes sense from the fact (even though I have no personal knowledge of the man), that he currently is the Mayor of Gosford, which for my non-Australian readers is a Town to the north of Sydney between Sydney and Newcastle. So, he has experience in the political field being the mayor and as a coach the man knows how to deal with a bunch of ruffians, which pretty much makes him ready to become the next Australian PM. Nathan Bracken is another story. He does not seem to have any real experience; however, that in itself is not an issue. As this is an election year in Australia, we see all kinds of people coming out of the woodwork, with the odd politician not having the ability to identify any issues he stands for. The latter part was quite the giggle for the Australian Facebook community. So there is no way that Nathan Bracken would do any worse and we all have to start at some place and some time. John Singleton will be sponsoring these two new contenders for the Independent party.

How bad is this idea?

John stated that he is fed up with the central coast being ignored. He was quoted in the guardian article stating “someone has to keep the bastards honest” and when we consider politicians on a scale slightly larger than just Australia, there is a genuine support for that statement.

The issue does remain if there is not more in play. Singleton has massive interests in the Central coast, which are after all his own stomping grounds. Real Estate, resorts and a race horse operation. So we are talking an investment value that is running deep into the 8 figures. In a business mind having 2 politicians on your side is good business, which is why I as the devil’s advocate am wondering whether there is not more in play.

To be honest, he is not hiding his involvement (like that was ever an option), yet there will forever be a little shiver in my spine when politicians are knowingly funded by a ‘party of one’ and to whisk such that feeling can never be good. Singleton might have stated “It can do no harm and it can only do good”, but that is one part I feel, which is too often never the case.

Still, we have had several remarkable exceptions. Dick Smith for one, who has put his money where his mouth is, donated tons of money on all kind of good causes, whilst not cashing in on it in the past. Singleton too has been involved in charity events from the early 90’s. Australians are for the most, not that greed driven like we see all over Europe and America. These people made their fortunes long before 2004 and they survived the financial crash without a too much of a hitch. They have more than enough money and they likely realised that they can’t take it with them where they are going to go in the end (a lesson the greedy never learn).

Still, there is a dangerous precedence here. I am all for people getting into politics, especially if they are bright enough and when their past (sports, movies) give visibility to causes and goals the people really need. The issue I have is when one sponsor becomes deeply involved, even when the person involved does do this openly, it keeps me worried.

The article does however seem to speak true on some issues. The Central coast seems to be ignored too often, not unlike Sydney it has youth unemployment. Not unlike the NHS, they have their healthcare issues, which seems to affect all of Australia and the youth suicide numbers are rising all over the place, which includes the Central Coast. So the fact that Singleton wants this dealt with on his stomping grounds is fair enough, yet no matter how fair it is, I remain to some degree sceptical for the simple reason that in the majority it is too naive to believe that large political donors will not expect certain favours, a view that is held by a lot more people than just silly old me.

 

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August 11, 2013 · 13:48

The Soccer ball and other sports

This morning, I was woken up with the information in regards to ‘concerns’ in regards to the world championship soccer. I have never been much of a soccer fan, even though I was born in the Netherlands. It was never my cup of cacao.

When I heard of the concerns, I thought that made perfect sense, then my eyes saw the pictures of the stadium. I think they are concepts, not unlike other images that Google showed. No matter which one will be build, these stadiums are amazing pinnacles of design. It left with me that sparkle I had when I saw the first images of the Munich Olympics in 1972. It was overcast by events that will remain a black page on sporting events forever, but the stadiums looked amazing.

So is this about the stadium? Not quite!

As we introduce sports to other parts of the worlds, the sports will take on a new dimension, this is equally the case now that soccer will be hosted by Qatar (in 2022). It brings small changes. I saw the concerns and I do not disagree, yet what are the alternatives? Play a game at dawn and a game at night? Play only late at night?

Are those not alternatives? The nights can be cool in the Middle East, I experienced that first hand for months, so moving the cup date until late autumn, or perhaps early summer/late spring?

These are all options, yet the first thing I heard stated when the winter option was given, was that it could interfere with the FA Cup. (The Dutch are likely to state the KNVB cup). So is all this about the cup itself or the issues surrounding advertisement revenues?

The World cup is only once every 4 years, it’s not like it is a daily exercise. Qatar is also the consequence for growing the sport. They won fair and square and it was voiced (and I do not disagree) that it should be held there. Yes, player safety need to be on the forefront of considerations, which is why moving the event to a non-summer month is a good idea in my mind. If we look at www.weatheonline.co.uk we see that March to May, if the matches are early or late in the day seems to be the best, after that it is likely to be October to December (which might not be ideal for others). The days might be warm in these instances, yet the nights are definitely not warm, so there should be quite the cooling when the sun goes down.

I do find this situation interesting, with 209 FIFA nations, this is the first time that players will be subjected to these tropical conditions. Consider these tropical nations playing under what they would consider Arctic conditions? These players in a rare twist of fate will have the home weather advantage, and if in the end Scotland or Sweden take home the cup? What a party that would be!

In the article I disagree with the quote “His predecessor David Bernstein said in June that any plans to move the World Cup to the winter were ‘fundamentally flawed’.” (At http://news.sky.com/story/1126848/fa-boss-summer-world-cup-in-qatar-impossible)

Flawed by what reasoning? It is a given that his concern was the FA cup, that is fair enough, but this is the FIFA world cup! Yet, in all honesty, I cannot truly oppose his statement as it would disrupt national cups in many European nations, which is a truth. Yet, the idea becomes, why must we tailor to get it all? Should these players be subject to 64 additional games at all cost? Seems to be a little one sided. However, moving it to spring could be an idea too. I reckon that this could work if we take the sport into mind. Many cup officials in several nations are now playing with Excel to see the advertisement and sponsor ‘damage’ that is a direct consequence of these events.

That part seems not to be too ‘illuminated’ at present. Yet when we read the Telegraph (at http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/leisure/8552114/McDonalds-joins-Coca-Cola-and-Visa-in-calling-for-Fifa-change.html) we read “McDonald’s joins Coca-Cola and Visa in calling for Fifa change“.

It seems that these three are adamant in maximising their view at every expense (bang for the buck approach), even at the expense of sports. If Jamie Oliver is to be believed, then the hamburgers from McDonald are not for human consumption, so why are they a party to sport advice at all? In the article by David Warner at http://politicalblindspot.com/hamburger-chef-jamie-oliver-proves-mcdonalds-burgers-unfit-for-human-consumption/ the quote is: “After Oliver showed how McDonald’s hamburgers are made, the franchise finally announced that it will change its recipe, and yet there was barely a peep about this in the mainstream, corporate media.” This can be proven with the Google search terms ‘Jamie Oliver on McDonalds‘. There is no guardian or other large newspapers and the one result link from Google mentioning the Telegraph states “Jamie Oliver praises McDonald’s – Telegraph“.

You might wonder how this is all connected. The answer is simple: ADVERTISEMENTS! (aka revenue)

There are issues on several levels and these companies have so much pull that through advertisements they have pull with what is written. Consider the fact that the large players (Guardian, Washington Post, LA Times) are not for, or against, they just don’t seem to appear in the first load of result pages at all (according to the Google search).

The issue I am raising is that this all seems to be no longer about the sport. If it was then those ‘big players’ would accept the elected choice and accept the unfortunate event of one year less advertisement revenue (yeah right!).

The next issue is actually entirely the opposite. I am disgusted on the horror Russians perform on the Russian Gay community. The fact that these people get tortured and murdered and the torturers take pride in publishing pictures of the event is utterly unacceptable. So I understand the fact that people speak out against this level of violence. Especially Stephen Fry made a clear case against the Russian Winter games. If you support this then give support him and follow him on Twitter (@stephenfry). I support him, but I am personally not in favour of banning or stopping the winter games. For me the view is that once we intertwine sports with political causes, no matter how just or correct they are, then the one door of change might close permanently. Yes, what happens in Russia is wrong, but if citizens who are going there as athletes can instil change where politicians fail, is that not a worthy cause? When I grew up I learned pretty much the origin of the Olympics as it was quoted on Wiki “It has been widely written that during the Games, all conflicts among the participating city-states were postponed until the Games were finished. This cessation of hostilities was known as the Olympic peace or truce.” Is that not how wars were resolved? In case we see America getting involved in this, let us not forget, that if one is gay and not living in San Francisco, often their rights are silently forgotten. The guardian had an excellent presentation of that at http://www.theguardian.com/world/interactive/2012/may/08/gay-rights-united-states

They might not show the barbarism that Russia is currently presenting, yet the political lobby has been using gay rights as a racquetball between Democrats and Republicans for decades. I still feel that in the end, sport will be at the centre of unification. If we see and accept (at least I do) that the African American athletes were at the centre of the equalising force between racial differences, then sports could also be the equalising force for sexual differences.

I just hope that it will be sooner rather than later, because persecution has never ever been good for any soul. That applies for both the persecutor and the persecuted.

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August 10, 2013 · 02:09

Look horny!

Seems an odd title to start with, but whenever I see certain reports by boards of directors as they make it to the press, then I am reminded of an old Dutch cartoon called ‘father and son‘ about the conservative father and the progressive son. It was a political cartoon by a man called Peter van Straaten. In one of these drawings a man is standing with a camera whilst the woman is standing not that dressed next to the fireplace, the by-line is ‘Look Horny’. It was hilarious! So was the published remark from the Apple board of directors “Apple’s (AAPL) Board of Directors has grown frustrated at the company’s lack of visible innovation.”

Be innovative in this light is as weird as being horny on command. We can all be innovative at times, but we are innovative with the means at our disposal. In his case this is about vision. Was Steve Jobs the visionary, or was he the man who could recognise it when it was shown to him? Let’s face it; we all have ideas at time. I remember coming up with something that is now called Facebook. Hold on, wait! I am not claiming I invented Facebook. In the late 90’s Warner brothers had these web spaces that were hosted through a provider called Angelfire. There was the Halliwell home, the Babylon 5 home, the Bat cave. All forms of addresses that linked the subscriber to their favourite series, or movie. It was free and it came with 20Mb space. However, it was completely static. I thought it would be a good idea to have something similar and to let these members talk to one another. Our benefit would be that we could talk to them all, a place for free advertising at the cost of one web server and a few additional costs. My boss stated that this was not our mission (which was true) and that this would never work (Really?). I think I still have the e-mail somewhere. I had no other means to pursue this idea and in the end it would never have been anywhere near Facebook, so it does not matter.

The moral is that if your boss lacks insight, things will never get pushed forward. It seems that Steve Jobs had this insight in abundance. Likely he was one of these true visionaries and the timing was right. Timing is all in that field, come a little too soon and it will not happen, come too late and you are a copycat at best.

Does the board of directors at Apple comprehend this?

Perhaps Tim Cook has part of these abilities, perhaps not. Perhaps there is no real innovation to be gotten. Let’s just face that between the cassette, the mini-disc and the iPad there were many years of waiting. The origin of the cassette recorder was around the 1930’s, which was PRE WW2 and would not be a consumer item until decently after WW2. So it took almost half a century to get to the Mini-Disc and almost a decade to get to the iPod. Will it take that long for the iPod to evolve to something truly new? There is no way to tell, innovation comes in many forms and a real breakthrough is needed to shape innovation.

I reckon the new Mac Pro is sure sign that innovation is not dead, this is however nothing more than displayable innovation with to a smaller extent an engineering level of innovation, yet, this is nothing more than a new step forward, not a leap forward onto a new train. As for ‘new’, let’s not forget that Cray had the round professional computer (read mainframe) first, the Cray CDC8600, which was released in the late 60’s, so is the idea Apple had truly innovative? The Cray version came with a bench around it, so where’s my chair Apple!

There is also a downside to innovation the way Apple does it. That part is becoming more and more visible with the iPad. There is now the iPad2 and iPad3. My iPad1 is great, I bought it to use in University and it does exactly what it needs to do and I was until recently quite happy. Developers make applications for the device and I have bought a decent amount of them. However, recently, more and more applications can no longer be updated. Even more irritating is that some updated applications will no longer work and crash as these developers only seem to consider the new iPad’s for testing and not the old ones. More important, new software often no longer works on the old models, so from that we could come to the thought that the innovation of Apple comes at the price where a device like the iPad, must be replaced after two years, which seems an expensive approach for consumers.

Now let’s take a step back. Innovation should not be a hype word. The dictionary states it as: “the act of innovating – introduction of new things or methods.”

So Apple is not really adding anything truly new to their cascading fleet of devices. There is even the idea that in the end this step like approach is a really bad idea. They seem to forget that the economy is in a slump and most of us cannot afford a steplike replacement of our devices.

I reckon the board of directors should also realise that the ‘innovative’ track of Apple has been an expensive one for its consumers; I lost close to $8000, whilst Apple was all too eager not to step forward on their failings and I am not alone. How is that related? Well, when you lose money, until something TRULY innovative comes, why would you purchase that brand? In my case my expensive laptop had to be replaced after only 14 months and as such I did not buy an apple. I am not alone; several around me had such an uncomfortable experience with the iPhone 4 that they have since moved to a non-Apple android solution.

So perhaps their board of directors need to focus on quality of the innovation, not quantity of innovations. In the end, they have nothing valid to complain about. Apple is in the bulk of the homes in one way or another. Whether it is through desktop (iMac), laptop (Macbook Air/Pro) or handheld (iPad/iPod/iPhone). If you talk to 10 of your friends then it is likely that 5 out of 10 have at least one Apple device and 2 out of these 5 are likely to have more than one device. Plenty of CEO’s would sell their first born into slavery for such returns. So in plain words, what are these board members bitching about? Is it truly about innovation or is it about simple greed?

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